Lanxess announces 1,000 job losses as part of realignment

Specialty chemicals company, Lanxess, is cutting 1,000 positions worldwide by the end of 2016 as part of a major structural realignment.

The company says the job losses, which are the first of a three-phase realignment aimed at improving the “competitiveness of the business and [its] administrative structure”, should result in total annual savings of EUR 150 million as of the end of 2016.

"The realignment lays the foundation for Lanxess to return to sustainable growth in the mid-term. Downsizing the workforce is a necessary measure to improve our competitiveness," said Matthias Zachert, Chairman of the Board of Management of Lanxess AG.

The first phase of the realignment will result in a reduction of total headcount by about 1,000 positions worldwide by the end of 2016 – roughly half of which will be in Germany. The company says the affected jobs will be mainly in the administrative and service units, marketing and sales, as well as in research and development.

"These job reductions are tough. However, we have reached a fair agreement with the employee representatives in Germany after a series of constructive negotiations," said Rainier van Roessel, Member of the Board of Management and Labor Relations Director of Lanxess AG.

At the beginning of November 2014, Lanxess started the second phase of the realignment programme, which is aimed at increasing its operational competitiveness and focuses on the optimisation of sales and supply chains, as well as production processes and facilities. The relevant measures will be implemented in 2015 and 2016. 

The third phase of the programme, which is aimed at improving the competitiveness of the business portfolio, will focus on “horizontal and vertical co-operations” in its rubber business. This phase is also to be implemented in 2015 and 2016. 

"As of 2016, we will fully benefit from the savings made as a result of the realignment," said Zachert. "We can then start thinking cautiously about growth again – with the focus on our Advanced Intermediates and Performance Chemicals segments."

In the same statement the group reported sales in the third quarter of 2014 were level with the same period in 2013, at EUR 2.04 billion, with “marginally higher volumes compensating slightly lower prices.”